Analyzing Consumer Markets

By: Chetan Metkar(055) Darpan Thacker(056) Deepak Padhiary(057)

Analyzing Consumer Behavior

Topic Outline Model of Consumer Behavior Factors Influencing Consumer Behavior Types of Buying Decision Behavior The Buyer Decision Process

Model of Consumer Behavior

Consumer buyer behavior refers to the buying behavior of final consumersindividuals and households who buy goods and services for personal consumption Consumer market refers to all of the personal consumption of final consumers

Factors Influencing Consumer Behavior

Factors Influencing Consumer Behavior

Cultural Factors

Factors Influencing Consumer Behavior

Cultural Factors
Culture is the learned values, perceptions, wants, and behavior from family and other institutions
Values like individualism and freedom for American child where as respect for elders, honesty, hard work for Indian child.

Example : In certain European countries professionals use bicycles to go to work which might not be appreciated in Indian scenario.

Factors Influencing Consumer Behavior

Cultural Factors
Subculture are groups of people within a culture with shared value systems based on common life experiences and situations Indian culture further breaks down to subcultures based on factors like geographies, language, etc.

Factors Influencing Consumer Behavior

Cultural Factors
Social classes are societys relatively permanent and ordered divisions whose members share similar values, interests, and behaviors Measured by a combination of occupation, income, education, wealth, and other variables Example : Preference to channels varies according to social classes

Factors Influencing Consumer Behavior

Social Factors

Factors Influencing Consumer Behavior

Social Factors
Reference Groups are the groups that have direct or indirect influence on persons behavior. Primary : family, friends, neighbors, coworkers Secondary : religious, professional, trade-union Aspirational & Dissociative groups also play important role

Factors Influencing Consumer Behavior

Social Factors Family is the most important consumer-buying organization in society Husband-wife engagement in purchases varies widely by product category Children influence purchases directly or indirectly Research has shown that two-thirds of 13-21 year olds make influence purchase decisions of audio/video equipment, software and holiday destination

Factors Influencing Consumer Behavior

Social Factors

Social roles and status: The role the person performs in turn connotes a status

Choices vary as per persons role as well. E.g., the buying choice of social activist and a company manager differ.

Factors Influencing Consumer Behavior

Personal Factors

Factors Influencing Consumer Behavior

Personal Factors

Age and stage in life-cycle: Taste changes with age Adults experience transformations so their behavior changes more frequently Special events in life like marriage, childbirth, illness, divorce, first job, retirement give rise to new needs. Example : Titan came up with wedding collection

Factors Influencing Consumer Behavior

Personal Factors Occupation affects the goods and services bought by consumers. Software companies design different products for managers, engineers, etc. Adverse Economic situation like recession keeps customers away from luxury goods like Gucci, Prada and Burberry.

Factors Influencing Consumer Behavior

Personal Factors
Personality and self-concept: Personality refers to the unique human psychological traits that lead to consistent and lasting responses to the environmental stimuli Brand Personality is the specific mix of human traits that we attribute to a brand.
Stanfords Jennifer Aaker identified following traits in brand personalities : Sincerity, Excitement, Competence, Sophistication and Ruggedness Owing to ruggedness person might go for Woodland shoes

Characteristics Affecting Consumer Behavior: Psychological Factors

Model of Consumer Behavior
Consumer Psychology Marketing Stimuli Products & Services Price Political Distribution Cultural Other Stimuli Economic Technological Consumer Characteristics Cultural Social Personal

Motivation Perception Learning Memory

Buying Decision Process & Purchase Decision

Communications

Key Psychological Processes

Motivation Perception Learning Memory

Characteristics Affecting Consumer Behavior: Psychological Factors

1. Motivation A need becomes a motive when it is aroused to a sufficient level of intensity to drive us to act

1.A. Freuds Theory

Psychological factors are largely unconscious Consumer reaction to a product is beyond its stated capabilities Shape, Size, Weight, Material, Color, Brand Name shape peoples behaviors Use of Laddering Technique to trace a persons motivations

Social Relaxation Status Fun A Whiskey brand need to be motivationally positioned in one of these three appeals

Characteristics Affecting Consumer Behavior: Psychological Factors

1. Motivation (cont.) 1.B. Maslows Theory
Human Needs are arranged in hierarchy People will try to satisfy their most important need first e.g A starving man (need 1) will not take interest in the latest happenings in the art world (need 5), nor in how he is viewed by others, nor even whether he is breathing clean air(need 2)

1.C. Herzbergs Theory

2 factor theory that distinguishes satisfiers (factors that cause satisfaction) from dissatisfiers (factors that cause dissatisfaction) Absence of a dissatisfiers are not enough to motivate purchase

Characteristics Affecting Consumer Behavior: Psychological Factors

2. Perception

Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world from three perceptual processes

Selective Attention Selective Distortion

Selective Retention
Selective attention is the tendency for people to screen out most of the information to which they are exposed Selective distortion is the tendency for people to interpret information in a way that will support what they already believe Selective retention is the tendency to remember good points made about a brand they favor and forget good points about competing brands

Characteristics Affecting Consumer Behavior: Psychological Factors

2. Perception (Cont.) 2.A. Selective Attention

Current Need

Anticipation

Size of Stimuli

5% Disc ount

2% Disc ount

50% Discount

10% Disc ount

6% Disc ount

Characteristics Affecting Consumer Behavior: Psychological Factors

2. Perception (Cont.) 2.B. Selective Distortion 2.C. Selective Retention

Good Good Good Good

Good Good Good Good

Consumers distort information to be consistent with prior brand & product beliefs

Consumers remember good points about a good product they like and forget good points about a competing product Acts to the advantage of strong brands

Characteristics Affecting Consumer Behavior: Psychological Factors

3. Learning

Learning is the change in an individuals behavior arising from experience and occurs through interplay of:

Stimuli

Drives

Cues

Responses

Reinforcement

Characteristics Affecting Consumer Behavior: Psychological Factors

4. Memory

Short Term & Long Term Memory Associative Network Memory Model Nodes are stored information connected by links that vary in strength A spreading activation process from node to node determines how much we retrieve Brand Association consists of all brand related thoughts, feelings, perceptions, images, experiences, beliefs, attitudes etc.

Hypothetical LIC Mental Map

The Buyer Decision Process

Buyer Decision Making Process

Problem Recognition

Information Search

Evaluation of Alternatives

Purchase Decision

Post purchase Behaviour

The Buyer Decision Process

Need Recognition
Occurs when the buyer recognizes a problem or need triggered by: Internal stimuli External stimuli

The Buyer Decision Process

Information Search
Limited Heightened attention Active information search

Sources of Information
Personal sourcesfamily and friends Commercial sourcesadvertising, Internet Public sourcesmass media, consumer organizations Experiential sourceshandling, examining, using the product

The Buyer Decision Process

Evaluation of Alternatives
Beliefs and Attitudes Expectancy Value model

Purchase Decision Noncompensatory Model: The purchase decision can be affected by Attitudes of others Unexpected situational factors

The Buyer Decision Process

Post-Purchase Decision The satisfaction or dissatisfaction that the consumer feels about the purchase Relationship between: Consumers expectations Products perceived performance The larger the gap between expectation and performance, the greater the consumers dissatisfaction Cognitive dissonance is the discomfort caused by a post-purchase conflict

The Buyer Decision Process

Post-Purchase Decision

Post Purchase satisfaction

Post purchase actions

Post purchase uses and disposal

Types of Buying Decision Behavior

Four Types of Buying Behavior

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